Search

Begin New Search Topic Oil

281. Blood Oil in the Niger Delta

Author:
Judith Burdin Asuni
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
United States Institute of Peace
Abstract:
The trade in stolen oil, or “blood oil,” poses an immense challenge to the Nigerian state, harming its economy and fueling a long-running insurgency in the Niger Delta. It also undermines security in the Gulf of Guinea and adds to instability on world energy markets. The exact amount of oil stolen per day in the Niger Delta is unknown, but it is somewhere between 30,000 and 300,000 barrels. The loss to the Nigerian economy from illegal oil bunkering between 2003 and 2008 totals approximately US$100 billion. It is time for the international community to become more proactive in helping Nigeria address this complex issue. Efforts to control blood oil must be accompanied by actions against corruption, illegal arms importation, and money laundering. The enabling environment for illegal oil bunkering includes high levels of unemployed youth, armed ethnic militias, ineffective and corrupt law enforcement officials, protective government officials and politicians, corrupt oil company staff, established international markets for stolen oil, and the overall context of endemic corruption. The three types of illegal oil bunkering include small-scale pilfering for the local market, large-scale tapping of pipelines to fill large tankers for export, and excess lifting of crude oil beyond the licensed amount. The complexity of players in the illegal oil bunkering business, including local youth, members of the Nigerian military and political class, and foreign ship owners, makes it difficult to tackle the problem unilaterally. Previous attempts by the Nigerian government and international community to address illegal oil bunkering have had limited success in reducing the flow of blood oil. The problem of blood oil needs to be addressed multilaterally. Within the international community, the United States is uniquely positioned to take a leadership role in helping to dry up blood oil and address other issues in the Niger Delta.
Topic:
Conflict Resolution, Political Violence, Markets, Oil, and Armed Struggle
Political Geography:
Africa, United States, Nigeria, and Guinea

282. The Creed of Sacrifice vs. The Land of Liberty

Author:
Craig Biddle
Publication Date:
10-2009
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
The proper purpose of government, wrote Thomas Jefferson, is to "guarantee to everyone the free exercise of his industry and the fruits acquired by it." The government "shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." In accordance with this view of the purpose of government, the founders established a republic in which the government was constitutionally limited to the protection of individual rights-the rights to life, liberty, property, and the pursuit of happiness. In this new republic, men were free to think, to produce, and to trade in accordance with their own best judgment; thus, they were free to thrive in accordance with their intelligence, their ability, their initiative. The result was astounding. Nineteenth-century America was a land of unparalleled innovation and prosperity-and further political achievement. In addition to countless inventions that sprang up-including the steamboat, the cotton gin, vulcanized rubber, the telephone, the incandescent light, the electric power plant, the skyscraper, and the safety elevator-and in addition to the vital industries that arose or were revolutionized-such as the railroad, oil, and steel industries-19th-century America witnessed the end of slavery, which was recognized as a violation of the basic principle of the land. Between the end of the Civil War and the turn of the century, America came as close to being a fully rights-respecting society as any country has ever come. Men were essentially free to live their own lives, by their own judgment, for their own sake. Unfortunately, although the Land of Liberty was a great success, it would not and could not last. The founders established America on the principle of individual rights, but neither they nor the thinkers who followed them identified the deeper philosophic foundation on which this principle depends, namely, the morality of egoism-the idea that being moral consists in pursuing the values on which one's life and happiness depend. In the absence of this foundation, Americans have embraced philosophical ideas that are contrary to individual rights. Over the past century, Americans have increasingly accepted the morality of altruism-the notion that being moral consists in self-sacrificially serving others-and they have increasingly applied this morality to the realm of politics. Consequently, our government is no longer committed to "restrain men from injuring one another [and] leave them otherwise free to regulate their own pursuits of industry and improvement." Rather, our government regularly-and increasingly-"take[s] from the mouth of labor the bread it has earned" and redistributes that bread to those who have not earned it. Consider just a few of the countless altruistically motivated, wealth-redistributing laws and institutions that have been enacted or established over the past hundred years: The Federal Reserve violates the rights of Americans by (among other things) printing fiat money-thus debasing citizens' savings-in order to finance welfare programs, bail out failed banks, "rescue" bankrupt car companies, and the like. The Federal Deposit Insurance Corporation (FDIC) violates the rights of taxpayers by forcing them to insure the bank deposits of strangers. Social Security violates the rights of younger Americans by forcing them to fund the retirements of older Americans. The National Labor Relations Act (aka the Wagner Act) violates the rights of automakers (and other businessmen) by forcing them to "contract" with labor unions on terms that are detrimental to their businesses. Medicare and Medicaid violate the rights of taxpaying Americans by forcing them to fund the health care of the aged and the (allegedly) destitute. The Community Reinvestment Act violates the rights of bankers by forcing them to provide loans to people whom they regard as too risky for business. The Troubled Asset Relief Program (TARP) violates the rights of taxpayers by forcing them to purchase bad debt from failing financial institutions. The American Recovery and Reinvestment Act (ARRA) violates the rights of Americans by expanding the extent to which they are forced to fund welfare programs, unemployment benefits, government-run education, and the health care of others. Of course, federal, state, and municipal governments violate Americans' rights in thousands of other ways as well, but the foregoing indicates the enormity of the problem. The explicit "justification" for all such rights-violating laws and institutions-the principle behind all of them-is altruism: the notion that we have a moral duty to serve others, whether "the poor" or "the public interest" or "society" or "the common good." As Theodore Roosevelt put it, the government must "regulate the use of wealth in the public interest" and "regulate the terms and conditions of labor, which is the chief element of wealth, directly in the interest of the common good"; or as Franklin D. Roosevelt put it, the government must seek "the greater good of the greater number of Americans"; or as John F. Kennedy put it, the individual must "weigh his rights and comforts against his obligations to the common good"; or as Bill Clinton put it, the individual must "give something back" on behalf of "the common good"; or as George W. Bush put it, we must "seek a common good beyond our comfort"; or as Barack Obama puts it, we must heed the "call to sacrifice" and uphold our "core ethical and moral obligation" to "look out for one another" and to "be unified in service to a greater good." A government animated by this principle will increasingly force citizens to serve the so-called "common good"-and with each political success, the government will get bolder and more aggressive in its enforcement of this principle. This is why the U.S. government has graduated over decades from the mere redistribution of wealth via taxation and inflation . . . to the establishment of wealth-redistributing institutions and hubs such as Social Security, Medicare, and TARP . . . to the outright nationalization of businesses, such as American International Group (AIG), General Motors (GM), and Citigroup . . . and to the nullification of private contracts that stand in its way (e.g., employment contracts in the case of AIG bonuses, investment contracts in the case of Chrysler's senior-secured creditors). Under such expanding government control, explains an article in the New York Times: Businesses and private property . . . become not an instrument of private "egoism" but "functions of the people." They remain private wherever and so long as they fulfill their "functions." Wherever and whenever they fall down, the State steps in and either forces them to fulfill the functions or takes them over entirely. That description of what we have witnessed recently, however, was not written recently; it was written in 1938. Nor was the author describing conditions in the United States; he was describing conditions in Germany under the then-burgeoning National Socialist Party.
Topic:
Oil and War
Political Geography:
America

283. Oil-rent Boom in Iran?

Author:
Martin Beck
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
The present article aims to analyze the effects of high oil prices since 2003 on Iran. The theoretical basis of the analysis is the rentier state approach, the basic element of which is that rents are at the free disposal of the rentier. Empirically, the paper examines the issue areas of foreign policy, domestic policy and economic policy. After proving that the oil price—despite fluctuations—has constantly been at a high level in the first decade of the twenty‐first century, the discussion demonstrates that Iran has used the increased rent in‐come to support a populist policy. In terms of economic policy, the regime has pursued a redistributive strategy. The country's foreign policy, particularly the ostentatiously pursued atomic program, has been very expensive since it provoked sanctions whose costs were initially balanced only by high rent income. Yet, in his first term, Ahmadinejad failed to prepare Iran for the situation that has occurred as a result of the global financial crisis: the redistributive policy of the regime has meant that an oil price below US$70 or US$75 now constitutes a severe challenge for the Iranian state budget.
Topic:
Foreign Policy, Markets, Oil, and Financial Crisis
Political Geography:
Iran and Middle East

284. Media Briefing Booklet: President Barack Obama's Visit to Ghana July 10, 2009

Publication Date:
07-2009
Content Type:
Working Paper
Institution:
Africa Policy Information Center
Abstract:
Over the past decade, Africa's status in U.S. national security policy has risen dramatically, for three main reasons: America's growing dependence on Africa's oil exports, Africa's importance as a major battlefield in America's “Global War on Terrorism,” and Africa's central position in the global competition between America and China for economic and political power.
Topic:
Foreign Policy, Oil, and Terrorism
Political Geography:
Africa, United States, China, America, and Ghana

285. Saving Ghana from Its Oil: The Case for Direct Cash Distribution

Author:
Todd Moss and Lauren Young
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Ghana can be considered a relative success story in Africa. We cite six variables—peace and stability, democracy and governance, control of corruption, macroeconomic management, poverty reduction, and signs of an emerging social contract—to suggest the country's admirable political and economic progress. The expected arrival of sizeable oil revenues beginning in 2011–13, however, threatens to undermine that progress. In fact, numerous studies have linked natural resources to negative outcomes such as conflict, authoritarianism, high corruption, economic instability, increased poverty, and the destruction of the social contract. The oil curse thus threatens the very outcomes that we consider signs of Ghana's success. This paper draws lessons from the experiences of Norway, Botswana, Alaska, Chad, and Nigeria to consider Ghana's policy options. One common characteristic of the successful models appears to be their ability to encourage an influential constituency with an interest in responsible resource management and the means to hold government accountable. The Alaska model in particular, which was designed explicitly to manufacture citizen oversight and contain oil-induced patronage, seems relevant to Ghana's current predicament. We propose a modified version of Alaska's dividend program. Direct cash distribution of oil revenues to citizens is a potentially powerful approach to protect and accelerate Ghana's political and economic gains, and a way to strengthen the country's social contract. We show why Ghana is an ideal country to take advantage of this option, and why the timing is fortuitous. We conclude by confronting some of the common objections to this approach and suggest that new technology such as biometric ID cards or private mobile phone networks could be utilized to implement the scheme.
Topic:
Corruption, Economics, Oil, and Poverty
Political Geography:
Africa and Ghana

286. Yemen: Avoiding a Downward Spiral

Author:
Christopher Boucek
Publication Date:
09-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Yemen faces a great and growing number of challenges that endanger its political future and threaten its neighbors on the Arabian Peninsula. War, terror- ism, a deepening secessionist movement, and interconnected economic and demographic trends have the potential to overwhelm the Yemeni government, jeopardizing domestic stability and security across the region. Yemen's oil—the source of over 75 percent of its income—is quickly running out, and the country has no apparent way to transition to a post-oil economy. The dire economic situation makes it increasingly difficult for the government to deliver the funds needed to hold the country together.
Topic:
Security, Democratization, Development, Oil, and Insurgency
Political Geography:
Yemen and Arabia

287. Iran's Oil Wealth: Treasure and Trouble for the Shah's Regime A Context‐sensitive Analysis of the Ambivalent Impact of Resource Abundance

Author:
Miriam Shabafrouz
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
The Iranian revolution still appears to be a puzzle for theoretical approaches linking political instability and/or violent conflict to the resource wealth of a country. It therefore works well as a case study for the purposes of this paper: to show the necessity of a broader approach to the resource‐violence link and to highlight the “context approach.” The focus is on the violence that accompanied the events preceding the revolution, and also on the fact that this violence was mainly exercised by the rulers and—excluding the activities of militant groups—only very randomly by the masses. Many relevant contextual conditions had an impact on the downfall of the shah's regime: demographic (population growth, urbanization) and cultural factors (religious tradition, national identity); the vivid memory of several historical events; the personal preferences of central actors—mainly both the shahs—which in combination brought the country to an impasse; and the religious opposition to the regime. But upon closer examination, it becomes clear that many of those factors were influenced by resource‐specific conditions such as the amount and the use of oil income, sudden oil‐price drops, and external interference aimed mainly at the domination of the oil sector. It was the specific interplay of these and other contextual conditions—as much resource‐specific as general, and both within the country and on an international scale—that finally brought about the downfall of the regime.
Topic:
Oil
Political Geography:
Iran and Middle East

288. The 2008 Oil Price "Bubble"

Author:
Mohsin S. Khan
Publication Date:
08-2009
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
As oil prices began to rise in 2009 from a low point of about $40 a barrel in January to around $70 a barrel in July, a key question is whether the world is in for another oil price spike in the near term similar to that witnessed in early 2008. Several hypotheses were advanced when world oil prices started their inexorable climb from 2003–04 onwards, then skyrocketed from $92 a barrel in January 2008 to cross the $140 a barrel mark in June, finally hitting a record high of $147 a barrel on July 11, 2008, before collapsing to less than $40 a barrel in December (figure 1). There was the “peak oil” explanation, based on the theories of M. King Hubbert of “Hubbert's Peak” fame and his supporters, notably Colin Campbell and Matthew Simmons, that the world was running out of oil. There were the market “fundamentalists,” including importantly John Lipsky, the first deputy managing director of the International Monetary Fund (IMF), and Philip Verleger, a well-known oil expert, who argued that the fundamentals of demand and supply were primarily behind the extraordinary rise in oil prices in the first half of 2008 (Lipsky 2009a, 2009b; Verleger 2005, 2008). Interestingly, this fundamentals view was also shared by the US Treasury and was articulated by David McCormick, then undersecretary for international affairs, in a presentation in July 2008 at the Peterson Institute for International Economics. Finally, there were those who maintained that such an increase could only be a “bubble,” unexplained by peak oil theory or market fundamentals. Many financial-market participants were proponents of this third view, notably Michael Masters (2008), as well as the main oil producers, who were as surprised as anyone at the speed and size of the price increase over only a few months. Their argument was that the phenomenal increase in financialization of commodity markets during 2006–08, including in particular the oil market, led to speculation and momentum trading, which pushed oil prices way beyond their long-term equilibrium level as determined by fundamentals.
Topic:
Economics, International Trade and Finance, and Oil
Political Geography:
United States

289. Crisis in the Niger Delta

Author:
David R. Smock
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
The demands of the population in the Niger Delta to enjoy greater benefit from the oil produced in their region continue to go unanswered. The people in the Delta complain that oil-spill pollution has made their water undrinkable, gas flaring has made the air unfit for breathing, while revenue from the oil has paid for mansions to be built in the capital, Abuja. Although well armed militias have suspended their attacks for a few weeks, they threaten to resume operations soon. A Technical Committee appointed by Nigerian President Umaru Yar'Aduato make recommendations for action relating to the Delta made its report nine months ago, but the government has taken no action on the report. The government has offered an amnesty to the militants for a period that expires in early October, but so far few militants have responded. Oil production continues to be seriously reduced by the militants' attacks and by the stealing of oil (termed “bunkering”) by militants and others.
Topic:
Political Violence and Oil
Political Geography:
Africa and Nigeria

290. Oil in Venezuela: Triggering Violence or Ensuring Stability? A Context-sensitive Analysis of the Ambivalent Impact of Resource Abundance

Author:
Annegret Mähler
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
This paper studies the causal factors that make the oil-state Venezuela, which is generally characterized by a low level of violence, an outlier among the oil countries as a whole. It applies a newly elaborated “context approach” that systematically considers domestic and international contextual factors. To test the results of the systematic analysis, two periods with a moderate increase in internal violence in Venezuela are subsequently analyzed, in the second part of the paper, from a comparative-historical perspective.
Topic:
Oil and Political Economy
Political Geography:
Latin America and Venezuela